Norway's centre-left election winners abandoned their attempt to form a majority government on Wednesday after the Socialist Left Party pulled out of the talks, a move likely to lead to the formation of a minority administration.
Labour, the Centre Party and the Socialists won a majority of seats in a parliamentary election on Sept. 13, but failed to bridge disagreements over the environment and wealth distribution during exploratory talks this week.
The country's oil and gas production, and its contribution to climate change, was at the heart of the election campaign, and the absence of the Socialists in governement may mean any transition away from petroleum is likely to be gradual.
"We do not believe we can find a political platform ... to have an aggressive enough climate policy," Socialist Left leader Audun Lysbakken told reporters, explaining his party's decision.
Labour leader Jonas Gahr Stoere, who is expected to become Norway's next prime minister, had argued that a majority government would provide the greatest degree of predictability for the country.
"I had hoped for a different outcome," Stoere told reporters.
Minority governments are common in Norway, however, and incumbent Prime Minister Erna Solberg of the Conservatives has ruled in a minority for most of her eight years in power.
Solberg has said she will step down as soon as Stoere is ready to take power, with mid-October seen as the most likely timing for a transfer of power.
Labour and Centre later said they would now negotiate to seek to form a government together, rather than Labour seeking to rule alone.
"We have big ambitions together," Stoere told reporters.
In any case, the new government will be forced to negotiate with parliament on any proposals it presents, including on fiscal spending.
"We will lead a responsible economic policy," Stoere said.
Nowrway's oil and gas industry pumps around 4 million barrels of oil equivalent per day, accounting for more than 40% of Norway's export revenues, although output is projected to fall from 2030 onwards.
The Socialist Left Party wants to halt all exploration for new resources, which would hasten the oil industry's decline, but Labour and the Centre have rejected this position.
Labour is wary of potential job losses from petroleum's demise, and champions state-sponsored policies to encourage a transfer of engineering know-how from oil production to renewable energy.
(Reporting by Terje Solsvik, editing by Gwladys Fouche, Gareth Jones and Toby Chopra)
